Vietnam: The Next Potential Outsourcing Hub

Vietnam wants to become the next potential outsourcing hub in software industry and it is on the way of progressing to bright future

By Nga Vu
Published on: Tuesday, April 4, 2017 - 3:30pm ET


Vietnam: the next potential outsourcing hub

With the outburst of growing jobs in the outsourcing industry, there is a need to look for new locations for the next potential outsourcing hub. Todays, India, and China are expensive for Tech Outsourcing. The rising cost of outsourcing is due to the higher demand as well as higher competition. So, what is the new potential outsourcing hub for IT providers?

Thanks to its potentials and benefits, Vietnam is becoming the next potential outsourcing hub for foreign investors when it attracts more and more reputed software development corporations. According to a local newspaper published on May 29, the Vietnamese government and foreign investors are complementing a variety techniques and plans to bring in higher-margin and higher-tech businesses, boost the economy growth and keep up with better-establishing countries.

Six years ago, Vietnam was not included in a list of best offshore hubs for the new software-development business after British recruitment agency Harvey Nash PLC made a research. That was showed by the Wall Street Journey. While Philippines, India, South Africa and other better-establishing countries were becoming the potential outsourcing hub, Vietnam was still trying to produce bicycles, shoes, and clothes at the cheaper rates.

Acknowledging that, Vietnam has been struggling to change its future perspective. Nowadays, Vietnam possesses potentials for the new outsourcing hub for foreign investors. They include low wages, technique proficiency, and better English-language skill. Harvey Nash’s inspection team valued many positive changes of Vietnam when they went back to Hanoi for assessing their options. According to Wall Street Journal, 1,500 Vietnamese people have been employed by Harvey Nash through not only its business but also its partnership with FPT Software Corp. FPT Software belonging to FPT Corporation is a global software sourcing company in Vietnam.

The paper also added that Microsoft Corp. founder Bill Gates found Vietnam could follow India into outsourcing and software development when he visited Vietnam.

Furthermore, Intel Corp. made a decision to build a semiconductor factory based in Ho Chi Minh city, which marks the turning point of Vietnam becoming the new outsourcing hub.

Top companies such as Samsung, LG, Intel, and Microsoft have conducted their startup projects in Vietnam, which give them heavy benefits.

Thanks to Vietnam’s favorable infrastructure and available labor pool, Ho Chi Minh City of Vietnam was ranked as the top non-Indian city in the 2006 review of the most potential competitive outsourcing cities by California consultancy NeoIT. Shanghai and Manila are other non-Indian cities in the top 10 of the most competitive outsourcing hubs.

However, it is still a long way to go if Vietnam wants to become the reigning outsourcing hub in Asia.

Furthermore, the global outsourcing industry requires the talent labor pool and the good quality of telecommunications. In this respect, Vietnam has to make more efforts.

Vietnam is trying their best to increase the number for reputed companies, enhance a competent workforce and build up telecommunications. Vietnam is progressing and reaching to its prosperous and bright future.